The pandemic has created one of the hardest years on record for the office industry. Faced with low occupancy, increased responsibilities, and staffing challenges, facilities and office managers have had to make major adjustments to the way that they operate. Much of the corporate world was quick to respond, with work from home, enhanced cleaning, and office social distancing policies meant to keep employees safe and ensure compliance with governmental orders. This monumental shift will likely have lasting effects on office work that will last long after the pandemic is over. Many companies will probably continue to embrace at least part time work from home arrangements, which will force offices to compete with the home offices for workers’ time. On top of the sea change in space use, office owners are also now grappling with challenges of how to keep their spaces safe and efficient, whether they are occupied by five employees or 500.
Whether large or small, the office of the future is deeply resilient to all manner of disruptions. Building resilience into our workplaces is not random. It is a deliberate process of developing safer, smarter, flexible and more efficient spaces. Through conversations with a variety of industry experts, we have compiled an in-depth report on how workplaces are learning to adapt to COVID-19’s lasting effects on society, and build resilience that will persist well into the future.
When the world first locked down from the COVID-19 pandemic, we knew very little about the virus. Even basic questions about how it was spread, through surface contact or through the air, were not immediately clear. Since then scientists around the world have been studying this enigmatic strain of the coronavirus. As we learn more about the virus we are becoming much better equipped to prevent its spread in our buildings. Unfortunately, many governmental guidelines are vague and archaic, leaving it up to building managers to be educated about the latest developments. This is particularly important for the office industry as workplaces have proven to be places where outbreaks can happen. In order to bring people back to the office we must first be able to keep them safe. This requires staying up to date on the important discoveries and updates about the virus. Here are some of the main factors that contribute to a building’s risk of outbreak.
A calculated risk
“It is likely that we have all come into contact with trace amounts of the virus at some point,” said Dr. Michael Gao, a physician and founder of Haven Diagnostics. He likes to tell his clients that if they want to have no risk of exposure than they “better be prepared to live in a hazmat suit.” He does point out that this shouldn’t deter people from doing everything they can, as it really affects your risk of contraction. “What we are learning is that the difference between a low risk environment and a high risk one isn’t 25 or 30 percent more risky, it is more like ten or even one hundred times more risky.”
Dr. Gao thinks that, much like the regular flu virus, the amount that you are exposed to not only affects your chance of contracting it but determines how bad the symptoms will be. “The amount of particulates in the air has to do with a lot of factors, but what type of activity is being done is certainly a big one,” Dr Gao said. “Two people sitting quietly working is way different than two people yelling or breathing hard.” This is likely why we have seen large outbreaks associated with gyms, like the one that infected almost ninety people at a Spin class in late October.
Bathrooms have also been identified as a place particularly prone to spreading the coronavirus. The flushing of toilets has been proven to push particles into the air. Dr. Gao explained that shared bathrooms are a big risk factor, even if correct social distancing is practiced. Keeping occupants safe might be less about preventing any contact with COVID-19 than keeping that contact to an acceptable level. “We have all come to terms with the risk of driving a car and I think if things are done right we can get the risk level to something similar but never to zero. People don’t like that they don’t have control but you don’t have complete control driving a car either,” Dr. Gao said.
One of the riskiest locations has proven to be restaurants and bars. Dr. Gao hopes that this same risk level will not be applied to every building. “One of my patients came in recently that had had a stroke months ago but was afraid to come into the hospital. I think we are starting to see the negative effects of the fear. I think we would see a lot of societal benefits to shifting socialization away from restaurants and into more low risk environments like offices.”
The outside environment
COVID-19 has affected some areas of the country and even some areas of cities more than others. There are a number of factors that have nothing to do with the way a building is managed that can affect its risk level to occupants. Some of these are geographic. Density and reliance on public transportation are two examples. Others are regulatory like local mask and social distancing mandates. Others still are cultural as some populations have been shown to be less included to follow the guidelines even if they are in place.
Even though what happens outside of a building is out of the control of the building’s management, knowing the specific risk level of each property is a first step in assessing the level of precaution needed. Since the virus sometimes doesn’t cause symptoms for up to two weeks, case numbers are often a lagging indicator of the spread. But there are some leading indicators that can be useful, “You can see a correlation between how many people are wearing masks and how well they are social distancing and whether or not they have in-person schools with the chance of COVID-19 spreading rapidly in the area,” said John Cordier, CEO and Co-founder at Epistemix. His company is using data to create and test models for how the virus might spread throughout a city, or even a neighborhood.
When it comes to risk, not all cities are created equal. “It is quite clear that it is less about the disease than the social dynamics,” Cordier said. “You might have two cities that have the same demographic profiles but based on policies COVID-19 could spread more in one place than another.” One factor that has so far gone rather underreported, according to Cordier, is household structure, particularly the number and type of individuals that live together. “In San Francisco, you might have four or five people living in one house to cover rent. That is very different than five people in the same family living in a home together because the activity profile is different,” he said. Building owners and office managers would be wise to treat every location individually and look at aspects of the surrounding area to give them an idea of how and when to bring workers back.
Once we learned that the COVID-19 virus was an aerosol, meaning that it is diffused into the air, the race has been on to find ways to remove it from our indoor environments. Unfortunately, this is harder than you would think. Dr. Mark Ereth has been a researcher and professor at the Mayo Clinic for over 30 years. He’s also the Chief Medical Officer of SecureAire, an air purification technology company. He explained that it is important to keep in mind the size of coronavirus particles. “Remember that COVID-19 is an ultra fine particle, that means that [the respiratory aerosols that carry it are] around one micron in diameter. What is considered ‘fine’ is less than 2.5, so quite a bit larger,” he said.
The size of the particle matters because it requires a more dense filter in order to catch it. Mechanical and electric HVAC systems (like the ones found in most commercial offices) use filters that receive a MERV (Minimum Efficiency Reporting Value) rating based on several factors, including the size of the particles that are able to pass through. MERV ratings range from one to sixteen, with sixteen being the best, filtering out 50 percent or more of the smaller particles that ranges from 0.3 to one micron in size, 85 percent of those that range from 1 to 3 microns, and 90 percent of those from 3 to 10. For perspective, operating rooms in hospitals use MERV sixteen. Standard commercial office buildings are required to use filters with a MERV 8 rating, in accordance with ASHRAE (The American Society of Heating, Refrigerating and Air-Conditioning Engineers) standards, but at a level 8, smaller droplets under 3 microns can still pass through. Meaning, the minimum requirements for most commercial office buildings are not high enough to filter out SARS-CoV-2, the virus that causes COVID-19, which ranges from 1.5 to .6 microns in size.
While putting higher-rated filters in HVAC systems seems like an easy way to eliminate the virus from our buildings, the reality isn’t so straightforward. The higher the MERV rating the less air that the filter allows to pass through it. That means that more pressure is required to move the air through buildings, which is often not possible due to the existing fan strength and duct sizes.
Another ramification of the incredibly small size of this strain of the coronavirus is the way it affects its movement in the air. “These ultra small particles become very difficult to eradicate from space,” Dr. Ereth said. “Just to give you an idea, in operating rooms the air is replaced every three to six minutes, in office buildings it is more like a few times an hour.” For buildings to be able to eradicate all COVID-19 particles it would need “something like a 40 mph wind.” This is, for multiple obvious reasons, not feasible.
The reason that these ultra small particles are not pulled out of the air, even with the negative pressure that a building creates, has to do with a phenomenon in physics called Brownian Motion. Once particles become small enough they are no longer only governed by our worldly forces like gravity and wind. They have an electromagnetic charge that can keep both keep them floating and help disperse them throughout a room. Dr. Ereth and his team are working on a way to “condition” these tiny floating particles to help make them settle on surfaces and be pulled into filtration systems.
Dr. Ereth pointed out that this method is different from Bipolar Ionization or BPI. This technology releases ions into the air, capable of rendering infectious particles deactivated. BPI is used by buildings around the world but was not at first approved by the CDC as a way to combat the coronavirus. We spoke with William Bahnfleth, Professor of Architectural Engineering at Penn State University and head of the ASHRAE pandemic response taskforce, about this somewhat controversial filtration process. “The problem is that it takes a long time to conduct and evaluate tests on the safety of any new technology,” he said. “We know BPI is good at removing particles from the air but the question of where they go is yet to be determined.” The concern is that these particles fall onto surfaces and can lead to ‘fomite’ transmission, another way of saying transmission by contact with infected objects.
“There is also some concern that some of the byproducts of BPI are harmful to humans,” Bahnfleth explained. The levels of hydrogen peroxide and ozone that are produced by most BPI systems is reported to be well within the acceptable range when it comes to human consumption but those reports come from the manufacturer themselves and have not been independently verified.
Since the outbreak the CDC has updated their guidance around BPI systems and ASHRAE has followed suit:
“If you are considering the acquisition of bi-polar ionization equipment, you will want to be sure that the equipment meets UL 2998 standard certification (Environmental Claim Validation Procedure (ECVP) for Zero Ozone Emissions from Air Cleaners) which is intended to validate that no harmful levels of ozone are produced.”
Although, they do issue a disclaimer to using this type of filtration: “Relative to many other air cleaning or disinfection technologies, needlepoint bi-polar ionization has a less-documented track record in regard to cleaning/disinfecting large and fast volumes of moving air within heating, ventilation, and air conditioning (HVAC) systems. This is not to imply that the technology doesn’t work as advertised, only that in the absence of an established body of evidence reflecting proven efficacy under as-used conditions, the technology is still considered by many to be an ‘emerging technology.’”
One of the most important calculations when it comes to a building’s indoor air quality is how often the air is being exchanged with clean air. ASHRAE’s suggestion of six air changes an hour for office buildings is akin to the recommendations for non-critical healthcare facilities. For a lot of buildings this is not possible so this calculation can be augmented with other techniques such as portable air filters or UV-C lights, which have known disinfecting properties. “Office operators need to find a way to get enough filtration of clean air intake to be able to add up to the recommendation,” said Bahnfleth. “Sometimes it takes a lot of different methods working together to get a room to a place where there is a low level of transmission risk.”
The problem is that sometimes this calculation doesn’t represent reality. “Air flow within buildings is a diabolically difficult thing to understand,” said Patrick O’Neill, North American President of asset management technology company mCloud Technologies. He has spent much of his career examining air flows in buildings and so knows first hand the complexity of the way that the air mixes in a space. “You know where your supply and return ducts are but you don’t know how much air actually goes to diluting the air in the room versus short circuiting,” he explained. Much like electricity, air prefers to travel in the path of least resistance so some of it may go from the supply duct directly to the return (exhaust) without meaningfully mixing with the air in the room. While it might seem like this could be avoided through careful design, O’Neill cautioned, “even the difference between one interior door being open or closed can completely change the way the air flows through an entire floor.”
The position of return vents are also important to note. Outbreaks have already been reported for groups of people that were sitting next to exhaust ducts and therefore in the path of the viral particles on their way out of the room. To understand which ducts are pulling (and pushing) the most air O’Neill suggests conducting an air balancing test. This is done by trained teams that measure the air flows and room pressures and carefully open and close flow dampers to ensure the ventilation air is uniformly distributed among the occupied spaces.
While there is not currently a test for COVID-19 particulate concentration in the air, there are ways to monitor how well your ventilation system is performing. “You can use proxies for ventilation efficiency by measuring levels of carbon dioxide, particulates and VOCs [volatile organic compounds] that can be monitored to give you an idea of how well your ventilation system is diluting other types of contaminants and, as such, how likely it will be doing the same for aerosols like COVID-19,” O’Neill said. That is, of course, if these types of sensors are installed and set up throughout a building. “Since it is so hard to understand how much of the virus is in the air the easiest thing to do is just to require masks and catch as much of it as possible before it gets into the room,” O’Neill said adding, “don’t be fooled into safety by plexiglass dividers, the air just goes right around it.”
Another important, although somewhat contested, factor in a building’s risk of outbreak is its internal humidity. One of the researchers that has been studying the effect of humidity on both the virus and humans is Dr. Stephanie Taylor. She was a cancer researcher and pediatric oncologist that started studying MRSA infections in hospitals. By studying infection rates along with good old petrie dish samples from hospitals she was surprised to find that the most statistically significant correlation was with low relative humidity in rooms.
“You have to remember that viruses mutate and adapt much more quickly than humans,” Dr. Taylor said, “so when we have low humidity environments we have both self selected for diseases that live well in them and reduced our own resistance to them.” A long running study of nursing homes has shown that there is usually a spike in respiratory infections when humidity drops below 40 percent. ASHRAE has suggested a humidity level of between 40 to 60 percent. While many climates have that level of humidity naturally things change when outside air gets heated or cooled. The term relative humidity takes into consideration temperature, as colder air has less capacity to store water vapor. So when you take moist, cool air from the outside and heat it up you change relative humidity even though you don’t add or remove any water.
With all of the evidence of humidity’s effect on viral transmission there are still negative effects from increased humidity that should be considered. Mr. Bahnfleth, the head of the ASHRAE task force, explained that “the humidity issue has been really contentious. If you have a building in a cold climate and you add humidity to the inside you can see damage due to condensation and moisture.”
Even Dr. Taylor understands that her recommendations can be met with resistance. “I don’t use the word humidity because it has a negative connotation,” she said, “I like to use the term indoor air hydration.” She said that at a very minimum buildings should have an understanding of the humidity of their internal air. “We realize that the harder the pill is to swallow the less people want to take the medicine so we recommend getting hygrometers and monitoring at least every type of interior space. That means you would only need to look at one hallway, one office space, one bathroom rather than installing sensors in each room,” she said.
The fact that COVID-19 can be spread as an aerosol has put a lot more responsibility for offices when it comes to monitoring and regulating air quality. The growing need for sensors and IT networks to monitor occupancy, airflow, and disinfection has increased the complexity of building systems and requires more expertise from office and facilities managers. Likewise, it has created a need for the building to communicate directly with the occupants, giving them important information about these precautionary measures and allowing them to reserve space rather than expecting them to expose themselves to an unknown situation. All of this has forced buildings and offices to become much more connected and intelligent.
Video: The Resilient Workplace
How the office industry is adapting to the challenges posed by the pandemic
Join us as we explore how the office industry is being upended by the pandemic. What role will the office play in a distributed workplace? Will occupiers rethink their location strategy? How will property and facilities managers keep us safe and healthy? What are the technologies and innovations that are transforming the office of the future? This multifaceted, fast-paced educational session includes interviews with healthcare experts, property industry researchers and panel discussions with workplace experts.
Produced in collaboration with New York City Real Estate Tech Week and Propel by MIPIM
Talk of smart buildings, while boiling hot at the beginning of the year, has simmered in the wake of the pandemic. Smart building capital expenditures often went on the back burner as more urgent matters like health and safety took priority. With the new focus came new requirements for what occupants need out of their buildings. The contradiction is that these new safety needs also require buildings to be more intelligent.
The quantity, quality and type of data available to building managers is the difference between workspaces that know very little about what goes on inside them and ones that can be proactive in the way they protect and engage occupants. In some cases, this date isn’t being collected in the first place, while in others the data is there but isn’t being used to its full potential.
Offices can only be as intelligent as the data they have access to. The first set of eyes and ears for this is often the property’s access control systems. “Property managers and tenants want to be able to monitor health protocol compliance as well as overall occupancy,” explained Steve Van Till, CEO of Brivo, a company that provides cloud-based access control technology for physical security and IoT applications. “Automating health protocols with mobile apps is one of the primary ways to create this data efficiency. Occupancy data on a dashboard gives a real-time view into usage and how close it may be to limits. It also throws off long-term value that can feed into future leasing decisions.” From a resiliency perspective, understanding occupancy levels as they change minute by minute can allow for more nuanced access policies for employees looking to come into the office, while also cluing in more effective remote work strategies.
“If you want to optimize anything, you have to measure it,” said Bengt Johannes Lundberg, CEO of IoT sensor maker Disruptive Technologies. Using IoT sensors to measure and monitor metrics from occupancy to temperature, humidity to object proximity in real time creates dozens of new avenues for efficiency optimization which will be critical in understanding operational capacity during and after the pandemic.
Operational efficiency is no longer just about saving time and money. With COVID-19, operational efficiency is also a safety issue. New procedures for ingress and egress through a building have been established alongside new safety measures like temperature checks and screenings. Keeping workers safe has dramatically ramped up the man hours required by on-site staff. Slowing down processes isn’t a solution, and several outbreaks have been traced back to people simply waiting. Keeping efficiency high and preventing lines from forming in the lobbies of offices will keep workers healthy and happier.
Access control systems with touchless components have been a focus area for many offices since before the coronavirus crisis, but the pandemic has increased the prioritization of this technology. Modern access control systems can suspend user access automatically until they go through a screening checkpoint, controlling traffic flow and reducing close contact. If a positive case is caught, some systems can also create contact tracing lists. When it comes to actually unlocking and opening doors, there are a range of solutions now in use. These range from simple implementations like foot pull doors to advanced solutions like phone app credentialing systems that combine a biometric component with an extra layer of security since the building must communicate with an authorized app on the user’s phone. However, the CDC has scaled back some of their language as to the danger of contaminated surfaces. For ensuring long-term resilience, the biggest advantage of access control systems might be in their ability to feed data into the rest of the building’s components.
Another familiar building chokepoint is the elevator. Elevator companies are beginning to introduce voice and gesture-activated touchless controls to their elevator cars, but particularly in taller buildings, elevators can substantially slow down a space user’s journey to their workspace, potentially endangering them as crowds build up near the ground floor elevator doors. One solution is introducing a destination dispatch system to a building’s elevators. These optimization algorithms help direct elevator cars to different floors based on where riders need to go, rather than simply obeying a call button, and can drastically reduce waiting and transit times for space users.
Integrations and cloud architecture
A foundational element of this data integration is cloud support. Gartner projects that worldwide public cloud spending by end-users will reach almost $305 billion, up about 18 percent from this year. “The pandemic validated the cloud’s value proposition,” said Sid Nag, Research Vice President at Gartner. Cloud data architecture offers offices scalability and flexibility as their environment adapts to the post-pandemic requirements. While real time access and awareness is still a primary driving factor for cloud adoption, today’s customers need more. “The platform had to focus on data integrity, disaster recovery, and system resiliency. It also needed to be scalable,” explained Bill Lines, Chief Information Security Officer at PlainsCapital Bank.
The cloud brings together a place for data to play in the same place and support a hybrid work environment, a big jump from the operational silos of building systems in previous years. These included those related to building operations, access control and visitor management, overall tenant experiences, and more. But just because the data is in one place doesn’t mean that it properly integrates or relieves a burden on office operators.
This lack of true integration is a point of contention for Sid Jain, CTO at Rise Buildings, a tenant experience company for multifamily and commercial real estate, who said that many solutions don’t do integration right simply because “it’s hard.” He went on to say that many companies claim multiple integrations, but all they’re really doing is linking out to another software system that requires another login and uses a completely different interface. Integration is a level above this, and it involves centralizing logins and automating data sharing in a way that begins to blend where one system ends and another begins.
AI and automation
The need for data continues to be a big theme across all industries and commercial real estate is no exception. “The future is harnessing the data you’ve got about everything going on in your building and really doing something with it,” explained Van Till. “The pandemic was a great accelerator of these trends, not only for investors but also the landlord community, property owners, and more. This information is needed to help see trends and make decisions.” But achieving this level of sophistication is not a simple process. Without the proper data collection tools, integrations and management processes in place, it will inevitably be destined to fail.
One of the most exciting capabilities within intelligent offices is automation, particularly those that use conditional statements, such as “when X happens, do Y.” The two biggest consumer-oriented conditional logic tools are IFTTT and Zapier. Using these tools, office managers could create rules like the following: If there are five people in this office zone, suspend all other seat reservations until the next available time slot.
While simple in nature, conditional statements like the previous one are much more involved behind the scenes. Understanding how many people are in a space can be a result of multiple data sources like occupancy sensors, heat maps, or a reservation system. Data must be accurate and delivered in real time to trigger another appropriate and intelligent action like closing down the reservation system or suspending access to that area through smart door locks. “A lot of buildings still do things on a clipboard,” says Prasan Kale, CEO at Rise Buildings. “I know because I used to be an owner-operator myself. When you automate a building, it creates real efficiencies. It’s not good enough to have one silo. One silo is meaningless. It is extremely important to have comprehensive data across different filters.”
And having the technology in place is only the first step. You also have to get people to use the technology in your building before you can collect a truly robust data set. For this you have to engage people and give them good tools. The answer to this isn’t having a more complex tech stack, it’s having the right one. “People are sick and tired of hearing, ‘Oh, we have an app for that,’” said Kale. His data showed that the more apps people had to use the less engagement each of them got. He said that certain required features, like access control, were a necessary gateway into more engagement. The right technology is the one that brings it all together, that gives users many reasons to interact with it. These additional features create robust data that can tell managers more about their occupants and even predict their needs. As office spaces need to become increasingly more appropriate for their occupants’ needs, data-supported decisions are the only good ones.
One of the keys to bringing workers back to the office is helping them adapt to the new work environment. Offices have long been focused on creating productive spaces but they now need to do so with a much more flexible attitude when it comes to when and where we have to work. Of course, the big challenge here is that different industries, companies, teams within those companies and even individual workers have different workflows, requirements and preferences to get their work done effectively. That’s why the resilient office also embodies flexibility for its users. Flexibility is the degree to which an office allows its occupiers to get work done under a range of circumstances and through a variety of workflows and environments.
The rise in working from home in the U.S. as of June 2020
Since the onset of the outbreak, workplaces everywhere have seen an exodus from their cubicles, offices and bullpens into more remote environments. Working from home is up to 42 percent of the total U.S. labor force as of June 2020, as employees of all sorts of industries try to protect themselves and their families from the risk of an infection borne of the workplace. However, as the coronavirus pandemic turned from a disruption for a month or two into the defining force of 2020 and beyond, more and more people have started returning to the office. This looks different from company to company and person to person. Some businesses are not properly equipped to offer remote work as a long term solution, and so their workers have had to return to more or less work-life normalcy. Other companies are more flexible, but their individual workers may prefer to be back in the productive environment of the office for a day or two here and there. And of course other teams have members who have committed to staying remote for the long haul, either for preference or safety reasons.
It’s important to consider the impacts that our great remote work experiment will have on our long term remote work culture. Back when the outbreak was only thought to last for a couple months, it might have been easily possible to bounce right back to our traditional working arrangements focused on being in the office all the time. After almost a year of living in a pandemic it is quite likely that many of our new remote-focused routines and lifestyles will stick even after we get the all-clear to go back to the office. What this means for workplace providers and office owners of all stripes is that keeping office spaces flexible must be a new long-term priority. In a world where it’s easier than ever to simply work from home and skip the commute, offices will have to compete for our time.
According to Philippe Houdard, co-founder of the flex provider Pipeline Workspaces, flex space helps provide for people who want to work from home more but also crave the interaction of the workplace, an increasingly noticed contingent since the beginning of the pandemic. He added that “This is especially important for younger professionals who are just starting in their careers and don’t have access to mentors and leadership figures.” Flexible offices are also critically important in an era of heightened mobility. A recent poll by Fortune and SurveyMonkey found that 8 percent of American adults are more likely to leave their city or county due to the impacts of the pandemic. This figure is higher, 11 percent, in urban areas, which are the places most likely to have big concentrations of office space. Since flex space can allow companies to reduce their footprints and serve more workers spread over greater distances, it is likely that flexible offices will represent a big part of corporate resiliency plans long term.
Unlike social distancing, building flexible offices is not something that is completely new for the industry. Before the outbreak hit most of Europe and the United States, Joe Brady, Americas CEO of workspace consulting firm The Instant Group said that “as clients gain experience in procuring flexible space, providers are going to have to become more accommodating around specific demands from second- or third-time buyers of flex. This dynamic will only increase customization, specialization and nichification.” Since the rise of Regus back in 1989, different space providers have been focusing on developing new ways to allow workers to get the space they need to be productive. With the meteoric rise and precipitous fall of WeWork the focus of the flexible workspace shift was on co-working. During the pandemic this market has dried up, as many small business owners have chosen to work from home. But this has been offset by a huge uptick in appetite for flexible space by larger corporations who want this type of space for a more distributed workforce and are reluctant to sign large, long-term office leases with so much economic uncertainty ahead.
While office occupancy and leasing has been down across all sectors, there is evidence of the increasing desirability of flex space as opposed to other office types. According to JLL, “Although freelancers are more likely to shed coworking space as the COVID-19 outbreak stalls business, 67 percent of commercial real estate decision makers are increasing workplace mobility programs and incorporating flexible space as a central element of their agile work strategies.” This increasing demand is putting additional pressure on landlords to effectively offer flexible space. “Accelerated demand for flexible space and office services has left many office providers scrambling to activate flexibility across their portfolios, yet faced with obstacles from existing technology and systems,” said Jeremy Bernard, North America CEO for flex space technology provider essensys.
Flexible office strategies will probably persist well past the time span of the outbreak, reinforcing their role as an important part of the flexible office. According to a report from the freelancer marketplace Upwork, between 14 and 23 million Americans are planning on moving due to the impacts of remote work, with over half of people planning to move over two hours away from their present residences, making commuting to traditional offices harder to accept. Of course, not every company will jump on the flexible space bandwagon, and many may not allow their employees to work remote even once a week, let alone at their discretion. But the reality is that since so many different companies have recently announced extending or making permanent their remote work plans, including big names across a range of fields, like Microsoft, American Express, the outdoor retailer REI, and news company Reuters, offering more flexible working arrangements will probably become a point of competition and a potential threat to talent retention for companies that do not at least start to embrace it for the long term.
Of course, flexible workplaces don’t happen by accident, and they bring with them a number of challenges that unprepared managers and owners may not be ready to face. They also require careful coordination between property management and occupier space managers. “ There is much more complexity with the hybrid office,” said Joe DuBey, CEO of Eden, a workplace management software company. “Basically it is an operations problem.The bullwhip effect: Person A sends something to Person B who sends it to Person C. Problems compound.” When all those people are located in different buildings or home offices, communication gaps and missed productivity can follow.
To build a workplace that allows all occupiers to work flexibly, managers should work towards ensuring their technology systems are accessible via the cloud, so that management staff can deploy solutions remotely. Another important area to focus on is space reservations, where modern property apps allow workers to reserve all varieties of spaces within their offices, without having to come into the office to do it or call the office manager to place a reservation. Allowing workers to make their reservations in advance, while working at home, increases the capacity of smaller office spaces to serve a greater number of people, since more people will be in the office for high-productivity reasons, like meetings and breakout sessions, thus decreasing total occupancy and reducing total necessary square footage.
Another challenge in setting up a properly-equipped flexible workspace is ensuring telephone access for all employers, essensys’s Bernard added. When the pandemic hit, “many occupiers were left without a desktop phone, and in turn, without their work phone line due to sudden lockdown restrictions.” Ensuring business service continuity in such turbulent times is critical to ensure full resilience, and if occupiers themselves are counting on their flex space landlords to offer this sort of tool, landlords cannot afford to drop the ball.
Efficiency is always important but in times of financial uncertainty, it is paramount. Building owners and operators are trimming the fat and tightening their buckles wherever they can to streamline operations.The bottom line is that making a building run better saves money, promotes safety and creates a workplace that employees will be eager to return to. A cultural shift towards workplace flexibility has created new challenges, forcing buildings to operate more efficiently without a clear sense of how workplaces of the future will operate.
Efficiency gives owners and managers the flexibility necessary for resilience. Optimizing operational and energy usage unlocks new net operating potential. For owners and managers, saving money on operational energy costs goes beyond boosting the bottom line. In today’s climate of corporate responsibility, blue chip corporate occupiers are pursuing their own sustainability and cost efficiency goals that owners must be willing partners in if they’re to attract the highest quality tenants. Getting owners, facility managers and occupiers on the same page creates new efficiencies that benefit all involved. All it takes is commitment and the right technology.
Nearly 30% of energy in an office building is wasted. Wasted electricity takes many forms, like escaped heat, unoccupied spaces being cooled, or mechanical rooms with equipment left running unnecessarily. Every night in New York City, residents can look out their window at a sky of lit, empty offices. During the pandemic, even more energy is being wasted. How much more energy is being wasted is difficult to say. Empty office buildings don’t have a low power mode. Buildings at 5% occupancy during the typical workday still consume roughly 80% of the energy needed for normal operations. Much of that energy is being used to keep the building safe and operational, but a much larger share is going towards providing ventilation and lighting to workers who aren’t there.
New York City buildings haven’t been able to cut back on energy use for three primary reasons. First and foremost are health and safety concerns. Infrastructure equipment like boilers and chillers were not designed to be turned off, and in many cases the CDC does not recommend it. Lease requirements like service level agreements play a major role, stipulating how a tenants’ space is to be kept and when it’s expected to be accessible. Many lease agreements weren’t designed with a pandemic in mind. Lastly, plug load demand, the energy used from electrical outlets, has remained high during the pandemic. To work remotely, employees must be able to access servers and computers humming along in empty, dark offices.
“All three factors combine to maintain high levels of energy usage,” NYSERDA Director of Market Development Patrick O’Shei said. “Energy was used to condition spaces to be ‘occupied’ by those who were working somewhere else. It was structural in nature, based on how things were designed to work.”
Actions by owners and managers are not the only way to make a building more efficient. Efficiency improvements are aimed at general building lighting, heating, ventilation, cooling, and water heating. City and state governments around the country are implementing cost-sharing incentives and other types of policies to promote the adoption of new energy efficient building infrastructure improvements. Real Time Energy Management (RTEM), high efficiency boilers & chillers and advanced forms of lighting are proven to pay for themselves. Landlords on the leading edge are already implementing high efficiency technological improvements to every form of energy usage they can control. But landlords and managers can’t control one of the biggest users of energy; the plug load.
Upgrading building systems plays a key role in making energy use more sustainable but doesn’t tackle the root of the issue. Reducing plug load is the biggest unaddressed opportunity in energy efficiency. More and more digital technology in the workplace has ballooned plug loads in every office building for decades. Plug loads now account for over 50 percent of energy consumption in some buildings, according to the General Services Administration (U.S. General Services Administration, 2019). Sky rocketing plug loads have set the standard in lease New York City at roughly 5 watts of plug load per square foot. “In high tech, net zero designed space, you’ll see that need go as low as 1.2 watts per square foot,” O’Shei said. “ You can have a high tech, high performance office that requires a lot less energy than is currently asked for.”
Passing on the cost of electricity to tenants means occupiers must be on the same page as owners. Limiting load capacity in buildings will require new incentives and technology to achieve the type of efficiency necessary to move our buildings into a sustainable future. But owners and occupiers aren’t always on the same page when it comes to the power bill. If owners want to save energy, they need tenants as allies.
New York’s Local Law 97 is a step in the right direction. The law places carbon caps on most buildings over 25,000 square feet, accounting for roughly 50,000 buildings across the city. The caps will go into effect in 2024, slowly becoming more stringent overtime, aiming to eventually reduce carbon emissions 80 percent by 2050. The law will facilitate conversations and partnerships between landlords and tenants working together to avoid fines and pay for lower energy costs. Practically speaking, it’s easiest to make efficiency gains at the beginning and midpoint of a lease. Any offices over 10,000 square feet will typically be built-out on the occupants time. During the design and build out, landlords should be honest about the building’s functionality and efficiency goals, laying the groundwork in the lease for energy savings sharing as part of the covenant.
From large financial institutions to tech giants, many of the best tenants have ambitious corporate sustainability goals. Working with tenants to help them achieve their own goals creates lasting relationships that lead to renewals and expansions, further incentivizing a commitment to efficiency.
This report was underwritten by:
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